FAQs of the facility Investing for Employment (IFE)

• No, such a project will be classified under Category 2

Yes, this is possible as long as both applicants and the project itself meet the eligibility criteria. The categorisation depends solely on the project type: Category 1, not-for profit without generation of any revenues; Category 2, not-for profit but revenue generating.

• The categorisation depends solely on the type and nature of the proposed project investment. For category 2 (non-for-profit), it must be assured that all assets belong to a non profit entity and that potential revenues / profits cannot be distributed to private entities or persons. If any of the conditions is not met, then it will be Category 3. In both cases, most of the jobs will be created within third entities (i.e., companies operating in the private sector), which should be supported by Letters of Intent from such third entities.
• A basic condition for the acceptance of a project proposal is the creation of jobs. As such, the project must clearly demonstrate how and where the graduates from the trainings will find new jobs (non-existing) in the private sector.

• It depends on the candidate type and the project’s objective. If assets belong to a profit oriented entity or if the project generates revenues or profit, which may be distributed to private entities or persons, then Category 3 or Category 4 apply.

• No; category 1 may apply for all kind of projects as long as they are non-for-profit and do not generate revenues

• Yes, but only if this project does not generate any revenues, otherwise it will be category 2. . However, if the project is for profit or assets belong to private entities, then Category 3 or 4 apply.

• IFE does not finance real estate projects.
• Please note that building and equipping a technology centre is not sufficient per se. The applicant(s) also need to be qualified to operate such a centre and be able to offer technical support to the users of the centre, either in-house or outsourced.
• If the goal is commercial (profit generation and distributing dividends), then it falls into Category 3 or Category 4. Category 1 only applies to projects that do not generate any revenue.

A project submitted by a private company can be considered as category 2, provided that:

• The project's paramount objective is for common benefit
• All assets co-financed by the IFE will belong irrevocable to a non-profit entity
• Potential revenues / profits generated by the project will not be distributed to private entities or persons

In principle yes, as long as projects fulfil the conditions of Category 1 or 2

• Yes, but only if the foreseen project does not generate revenues
• The basic condition for the acceptance of a project proposal is the creation of good and new jobs in the private sector (KPI 1). As such, the project should clearly demonstrate how it will create such jobs in the private sector beyond the training opportunities.

Yes.

• No, the number of jobs created is irrelevant for the categorisation.

• No. If the project is made up of several components from different categories, then each component of the project should be presented separately.

• In principle, IFE offers the possibility for a re-categorisation. The project will only be rejected, in case the applicant does not agree to the re-categorisation.
• Yes, if the ultimate possible grant amounts drop below the minimum ticket size, then the project will no longer qualify for an IFE grant.
• Notably, if the financial status of the applicant appears too weak or too low to cater for the increased own contribution, then during the evaluation process, the score might be reduced or the applicant disqualified.

Yes. Local authorities, as public entities, meeting the general eligibility criteria, can participate in the Calls for Proposals.

Yes.

Yes. Each project must be submitted independently and it will be evaluated on its own merits. The applicant (individual or consortium) must demonstrate the technical and financial capacity to undertake and implement multiple projects running in parallel.

IFE is open to all sectors, unless specified in the specific Call for Proposals. However, the ‘Exclusion List of KfW Group’ defines specific sectors that IFE does not finance. Please refer to: https://www.kfw.de/PDF/Download-Center/Konzernthemen/Nachhaltigkeit/Ausschlussliste_EN.pdf

IFE per se does not prioritise or provides special considerations for projects that target disadvantaged and/or underrepresented groups of the society. However, applicants are encouraged to portray these effects as part of the project concept.

No, each applicant is required to submit its own application and related supporting documents, including financial statements. Financial statements must be audited in case of private commercial companies. Bank statements can, however, be provided e.g. to verify planned cash contributions. Please note that banks are not eligible for IFE CfPs.

Professional associations are eligible. The categorisation depends on the type of the proposed project, not the applicant (please refer to the Guidelines for Applicants for details on project categories).

Microfinance institutions are not eligible. Financial institutions are not eligible under the IFE CfPs, including commercial banks.

IFE expects from all members of a consortium to demonstrate a healthy financial situation, by respecting the following criteria:

• Average yearly turnover must be greater than or equal to 50% of requested grant.
• At least 2 positive EBITDA in the past 3 years.
• A debt/equity ratio of max 4:1.

Such a project is eligible under the following conditions:

• Applicant must be a separate legal entity duly registered in the concerned country, in Africa or EU/EFTA.
• Applicant or at least one member in case of a consortium must be duly registered and operating in the concerned country of the Call for Proposals.
• Jobs will be created in the concerned country of the Call for Proposals

These investments are eligible as in-kind contribution under the following conditions:

• The investments are necessary for the envisaged project
• The value of the investment is certified by an external, qualified expert
• It is not an ongoing project

These investments are eligible as in-kind contribution under the following conditions:

• The investments are necessary for the envisaged project
• The investments only concern the preparatory activities of the project (e.g. technical studies)
• The value of the investment is certified by an external, qualified expert
• It is not an ongoing project

No, though a consortium might provide combined financial capacity and former management experience as added-values for meeting IFE criteria.

Yes, as long as they meet the eligibility criteria for the entities and the project.

Yes as long as the project complies with the IFE conditions as laid down in the Guidelines for Applicants.

If the project is too large for the subsidiary, then the parent company may apply as lead applicant. To keep in mind though that IFE will not finance projects that serve to refinance, restructure or rehabilitate a subsidiary or any company in general.

Yes, but only if the recently registered entity is an investee of an eligible individual applicant or any of the consortium members (e.g. subsidiary, joint venture, SPV), and if the respective shareholders of this entity are operating for a minimum of 3 years at the time of CN submission

Yes; subsidiaries or sister companies actively involved in the project should become consortium members.

No; jobs created at related companies cannot be counted as third party jobs (KPI 1b), but are considered as jobs created by the candidate (KPI 1a).

Yes, even a newly created company should be established at the time of application. In addi-tion, a recently created entity cannot be the lead applicant. In such cases the parent company should be the lead applicant and must fulfil the eligibility criteria.

Yes, but only under the conditions that the newly created company is owned by the former entity, that the former entity is still in operation and that the former entity is the lead applicant.

Yes, but only under the conditions that the branch office is a legally established entity in the country of the Call for Proposal, is operating under all licenses required for the given line of business and is a member of the consortium.

• The project’s concept must be mature and preliminary technical studies, market studies and financing agreements etc. should be in place or within reach. Please note that IFE will not accept any project, which fails to prove its maturity.
• The funding plan must be fairly defined at the concept note stage and finalised at FPP stage. Pre-agreements (i.e., supporting documents to be enclosed to the application) must be in place for the participation of investors, ideally at CN stage and compulsory for the FPP stage.
• Investments relating to activities already carried out cannot be supported or taken into account by IFE. IFE does not offer retroactive financing of already executed investments.

No, but each part of the consortium must play a relevant role in the project. Roles and responsibilities should be clearly defined in the concept note through a Memorandum of Understanding (MoUs) or any other supporting document that describes the outlines of an agreement that two or more parties have reached.

Yes, a maximum duration of 30 months applies after the signature of the Grant Agreement. During this maximum period all preparatory and investment activities must have been carried out (see Guidelines for Applicants for details).

• The value for leased land is considered eligible only in case of emphyteutic agreements in countries where there is no private property. The adjusted value has to be certified by an external certificated entity.
• Already executed downpayments for lease agreements can be considered as in-kind contribution.
• Recurrent lease payments are not eligible as these are considered operational costs.
• Value of leased equipment is not eligible.

Yes, but only during the preparatory / investment period of the project and only if the Technical Assistance is closely linked to the investment, absolutely necessary for the realisation of planned operations and carried out by external entities.

No.

Yes, it is considered an eligible cost item under the following conditions:

• The amount does not exceed 7,5% of the total investment budget.
• The costs comprise only working capital for the first 3 months of the operational period.
• The costs comprise only working capital related to raw supplies and consumables needed for the project’s production process, but not to expenses such as salaries, electricity, rent etc.

Yes, they are. Annual maintenance costs are considered OPEX instead, and not eligible for the IFE grant as belonging to the operational phase.

No. All investment costs must exclude VAT.
If VAT has to be financed by the applicant, the related costs have to be included under ineleigible costs in the investment plan.

No. Intangible contributions such as patents, brand names or copyrights, are not eligible.

• The applicant's financial contribution can be in cash or a combination of both cash and in- kind.

• In-kind contribution:
  • The value of the in-kind contribution shall not exceed 85% of the total own contribution. Projects proposals involving exclusively in-kind contributions will not qualify.
  • The value of the in-kind contribution must be certified by an external certificated expert.
  • Inflating the size or the value of the in-kind contribution could lead to disqualifying the project.

• Cash-contribution must be of a minimum of 15% of the overall own contribution, and the applicant should demonstrate documentary evidence for cash contributions (signed term sheets with banks or equity providers, bank statements etc.).

No.

Yes, but only in case the foreseen IT solutions or curricula are exclusively required for the foreseen project and the value is proven.

The value of each in-kind contribution must be certified by legally registered consulting companies and/or consultants, and supporting documents should ideally be submitted already at concept note stage. IFE may carry out an own evaluation or validation.

Yes, but only under the following conditions:

• The machines are necessary for the foreseen project.
• The actual value of the machines is certified by legally registered consulting companies and/or consultants.

• Yes, machinery in the process of being purchased can be included in the total cost of the project under the following conditions
  • The machinery must be necessary for the envisaged project.
  • Machinery currently procured cannot be co-financed by IFE.
  • It can only be considered as an in-kind contribution.
• It should be noted that IFE does not finance projects that are already ongoing (considered to have already entered the investment phase).

No. Intangible contributions are not eligible.

• Yes. The applicant’s own contribution can stem from own funds, or loans or other type of financial support, including grants from third parties.
• However, other property belonging to the applicant can only be considered as in-kind contribution in case it is needed for the foreseen project.

• Applicants can present an alternative cash flow projection with a reduced grant and increased own contribution and can endeavour to scale down the project, but to the extent that the project does not fall below the minimum grant or KPI thresholds
• Also, the project’s nature and objectives must not be changed.
• In case of an increased grant request, the applicant needs to provide strong and convincing arguments, why this increase should be accepted by IFE.

• Yes, as long as the financing conditions are acceptable.

Besides the formal eligibility criteria, public entities must demonstrate their ability to:

• provide their share of co-financing, as per IFE requirements for the indicated Category ;
• exhaust the own contribution before the disbursement of the scheduled IFE grant;
• provide evidence for the availability of funds to cover the operating costs of the project after the investment has been finalised. (e.g. provide information on its annual budget and upload a signed Letter of Commitment from a director or other authorised representatives committing the entity to make the required funds available.)

Yes, they have to be certified and audited (i.e., signed and dated) by an independent consulting company and/or consultants for private companies, which are obliged to have certified annual statements.
Entities not subject to the legal audit obligation of their accounts must document their budgetary balance over the past three years through other documented means.

The exchange rate at the end of the respective financial year shall be used for the conversion into EUR. You can obtain these historical rates from www.oanda.com. Please indicate always the source of the exchange rate figures used.

• No; certified financial statements in local currency have not to be converted into EUR.
• However, statements in languages other than English or French have to be translated.
• In addition, financial figures in local currency have to be converted into EUR, when filling out compulsory documents such as the ‘financial eligibility check tool’

Yes; however, all costs in local currency must be converted into EUR by using the actual exchange rate. For this purpose, the exchange rate used must be indicated. This applies to all Concept Note and Full Project Proposal level (SmartME templates, excel tables and other documents).

The certified and audited financial statements of the applicant (i.e., namely the parent company) must be submitted.

• In the case of a consortium, the turnover requirement applies to the combined turnover average of the entire consortium.
• Please note that other conditions must be fulfilled by all consortium members.

The financial projections entered in the "Financial Plan" template have to be based on the exchange rate at the time of submission.

All supporting documents in Arabic (i.e., financial statements, business licenses, etc.) must be translated into English or French at the concept note stage. Only shortlisted applicants will be required to present certified/notarised translations at the FPP (Full Project Proposal) stage.

Yes, it is mandatory. Financial data in funding plans as well as cash-flow projections must be submitted in EUR. Only financial statements are accepted in local currencies.

Jobs can be counted if they are created either at the Applicant entity or at an entity in the Applicant consortium (KPI 1a), whereas the role of each member of the consortium in the project must be clearly described.

Further, jobs can be counted if they are created at Third Parties (KPI 1b).

All jobs must fulfil certain conditions (see details in the Guidelines for Applicants) and only jobs created in the private sector can be considered.

Yes.

• Third parties are private entities not related to the consortium, where jobs are created as a direct consequence of the project.
• To be classified in category 3, the project must create at least as many jobs in the third parties as in the applicant entity/ies.
• Letters of intent must be provided on the qualified IFE template by third parties to prove job creation prospects.

No, these jobs have to be counted under KPI 1a